Correlation Between SPECTRAL MEDICAL and Salesforce

Can any of the company-specific risk be diversified away by investing in both SPECTRAL MEDICAL and Salesforce at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining SPECTRAL MEDICAL and Salesforce into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between SPECTRAL MEDICAL and Salesforce, you can compare the effects of market volatilities on SPECTRAL MEDICAL and Salesforce and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in SPECTRAL MEDICAL with a short position of Salesforce. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPECTRAL MEDICAL and Salesforce.

Diversification Opportunities for SPECTRAL MEDICAL and Salesforce

0.45

Correlation Coefficient

SPECTRAL MEDICAL  Salesforce

Very weak diversification

The 3 months correlation between SPECTRAL and Salesforce is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding SPECTRAL MEDICAL and Salesforce in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Salesforce and SPECTRAL MEDICAL is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on SPECTRAL MEDICAL are associated (or correlated) with Salesforce. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Salesforce has no effect on the direction of SPECTRAL MEDICAL i.e., SPECTRAL MEDICAL and Salesforce go up and down completely randomly.

Pair Corralation between SPECTRAL MEDICAL and Salesforce

Assuming the 90 days horizon SPECTRAL MEDICAL is expected to generate 2.0 times less return on investment than Salesforce. In addition to that, SPECTRAL MEDICAL is 1.22 times more volatile than Salesforce. It trades about 0.02 of its total potential returns per unit of risk. Salesforce is currently generating about 0.06 per unit of volatility. If you would invest  20,918  in Salesforce on April 22, 2025 and sell it today you would earn a total of  1,367  from holding Salesforce or generate 6.54% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

SPECTRAL MEDICAL  vs.  Salesforce

SPECTRAL MEDICAL

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in SPECTRAL MEDICAL are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, SPECTRAL MEDICAL is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Salesforce

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Salesforce are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Salesforce may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with SPECTRAL MEDICAL and Salesforce

The main advantage of trading using opposite SPECTRAL MEDICAL and Salesforce positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPECTRAL MEDICAL position performs unexpectedly, Salesforce can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Salesforce will offset losses from the drop in Salesforce's long position.

The idea behind SPECTRAL MEDICAL and Salesforce pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

Check out your portfolio center.

Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.